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21 July 2022

North Sea oil workers plan more strikes as pay lags behind booming profits

Rig crews want less precarious contracts, pay that reflects inflation and help with the switch to the renewables industry.

By Nick Ferris

In early July strikes among Norway’s oil and gas workers led to fears that gas deliveries to the UK could be paused. The Norwegian government had to step in to force oil companies and unions to reach a settlement.

Across the North Sea, British oil and gas workers have also been feeling short-changed. In May UK offshore workers on 16 drilling platforms staged wildcat strikes – that is, without union backing – and workers’ representatives warn that more could be ahead unless relations with employers improve.

Staff said that they had taken a 20 per cent pay cut when the price of oil dropped to $24 a barrel ten years ago, and it had never been restored even as high energy prices led to huge profits for oil companies this year. Brent crude was at $106 a barrel this afternoon (20 July).

The walk-outs were called off when Bilfinger UK, the subcontractor whose British workers first went on strike in May, joined the Energy Services Agreement (ESA), an agreement between three unions and 14 companies designed to promote fairness for workers and stability for employers. Workers were offered a 3 per cent pay rise from 1 July. This was far below inflation (which is currently 9.4 per cent), and workers were not invited to discuss future pay arrangements or working conditions.

“Most workers will tell you that this outcome is an insult,” said Dominic Pritchard, a GMB union officer representing offshore workers. “I think it very likely we will see more wildcat action in the coming months.”

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[See also: How Mick Lynch won the media war over rail strikes]

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Jake Molloy, an organiser at the RMT union, said: “Ultimately these are the guys who have been keeping the lights on while everyone has been working at home these past couple of years. We need what they provide for the country to function. A major industrial relations issue in the North Sea could have serious ramifications for the rest of the country.”

A Bilfinger UK spokesperson said: “As a member of the ESA, Bilfinger UK works collectively with all of the trade unions and other 14 co-signatory employers on setting terms and conditions for thousands of offshore workers, which includes pay. We are committed to regularly working with the trade unions and other employers through the ESA moving forward.”

An ESA manager, Irene Bruce, added that “trade unions and employers are continuing to work collaboratively to address the concerns raised by the workforce at this time”.

North Sea rig work has always been volatile, fluctuating as oil prices boom and bust. Yet problems for workers have been compounded in recent years as overall oil and gas output has declined, wages have fallen behind inflation and the pandemic destabilised the industry.

“I used to love my job," said Paul, who has worked on rigs for more than two decades. "Back when we had staff contracts conditions were good, pay was good and the camaraderie was great. Now, we are all on zero-hours contracts and expected to go out with 20 or 30 per cent less money than we used to.”

When the pandemic hit the UK, Paul lost his job without any furlough; his zero-hours contract meant he was ineligible. “I know guys who have given their all to this industry for three or four decades who suddenly lost everything,” he said. “Families have been split up because people had to move to their parents’ again. Then, when Covid ended, they expected us to just come back.”

A June 2021 survey of 610 offshore workers, carried out by the NGOs Friends of the Earth Scotland, Platform and Greenpeace found 75 per cent were on zero-hours contracts and 88 per cent were spending “a lot” of their own money on their training certificates.

North Sea oil and gas output peaked around the year 2000, and has been in decline ever since. A new offshore energy industry in the form of wind power requires many of the same skills, yet insiders have told the New Statesman that neither the government nor businesses are adequately enabling workers to make the transition.

Various schemes – including a £12m Transition Training Fund, a £25m National Transition Training Fund and a £62m Energy Transition Fund – have been set up to help workers to move between industries. However, an April 2022 survey of 500 rig workers, carried out by Gillian Martin, the SNP MSP for Aberdeenshire East, found that just 9 per cent believed there was “enough opportunity for oil and gas workers to transfer into the renewables sector”.

There are also concerns that vast new wind developments planned for the North Sea may not create enough local jobs. Modelling from the analysts Transition Economics said that nearly six times as many jobs could be created if the government regulated to ensure local ones were prioritised.

 

As the recent threat of gas supplies from Norway being halted shows, job security for energy workers is paramount. Better working conditions would also help to ensure an available and reliable labour force as the UK tries to meet its energy needs.

The decline of oil communities in Scotland would have major socioeconomic implications. Simply letting industries sink or swim – as occurred in many Welsh and English coal-mining areas in the late twentieth century – would undermine the UK government’s promise to “level up” the country.

[See also: The summer of strikes is about to get worse]

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